The Fed points to modest growth in the US economy and continued pressure on inflation in the Beige Book.

THE Federal Reserve (Fed) The U.S. Federal Reserve, in its August Beige Book released this Wednesday (2), reported that U.S. economic activity has shown modest growth since the beginning of July. Of the 12 districts monitored by the monetary authority, ten registered slight to moderate expansion, while two showed stability. According to the document, household consumption grew slightly, although consumers showed greater price sensitivity. Higher-value purchases remained strong among higher-income consumers, while car sales remained subdued due to weakened confidence, high fuel prices, and increased financing costs. Industrial activity gained strength in most districts, with particular emphasis on demand linked to the defense sector and the construction of data centers. Residential construction declined, while non-residential projects advanced, also driven by investments in data processing centers. Financial conditions showed a slight improvement, with loan volumes firm or rising in most regions. In the labor market, employment increased very little during the period. Three districts registered moderate gains, four showed slight growth, and five observed no change. Demand for workers remained strong in manufacturing, construction, and some services, while retail and hospitality weakened. Technical and skilled workers continued to be difficult to find, and wages advanced at a modest to moderate pace. Inflationary pressures persisted. Prices rose moderately in eight districts, as businesses reported high costs for energy, transportation, and raw materials, especially metals and petrochemicals. Tariffs also continued to put pressure on manufacturers' and retailers' costs. At the same time, greater consumer resistance to price adjustments limited the ability of some companies to fully pass on these expenses. In the agricultural sector, the Fed identified a slight improvement in conditions, although the outlook remains pressured. Livestock farming performed strongly, while crop producers continued to face difficulties. Overall, the outlook for the coming months remained positive, but with a high degree of uncertainty related to energy prices, economic policies, and international conflicts.

This text was translated by machine from Brazilian Portuguese.